Leisure, Lifestyle & Wellness
You Be The Judge

Love thy neighbour

Let’s see how the law applies to neighbourly relations. The biblical injunction of ‘Love Thy Neighbour’ is, unfortunately, not a common occurrence. Probably, because familiarity often breeds contempt. Two neighbours, Mr 1 and Mr 2, could not see eye to eye. No talk. No visits. Now, while one neighbour, Mr 1 is away his house catches fire. What is neighbour Mr 2 supposed to do?

The choices before him would be:

a)    Call the fire brigade
b)    Rush into the house by breaking down the door if necessary and save the belongings
c)    Make sure his own house and those of others are safe
d)    Try to contact the neighbour
e)    Call for all the possible help he can muster
f)    Do nothing. After all, it’s not HIS house.

What would you advise?
In law, neighbour 2 would be correct in taking any or all of the first five options. It is the duty of every citizen to protect property, his or anyone else’s. And neighbour 1 would not have a case against him... Even if he did not thank his enemy! We, often, hear of bystanders not interfering in a felony. It is very common and it is wrong. Each citizen is duty-bound to assist another human in need. Remember how, a few years ago, four passengers in a local train, including a journalist, stayed put while a mentally retarded girl was raped?

Good fences make good neighbours? Not always

Ardeshir Katrak was a lawyer practising in Bombay in the small causes court, mainly on Rent Act matters, protecting poor Parsis from rapacious trustees. As is our wont, we had asked him the question we ask every advocate. “Which is the most interesting case you have ever argued?” We repeat Ardeshir’s story.

Once upon a time, there were two farmers. They were neighbours. They shared a common boundary and they fought. Over what? A coconut tree.

Farmer A planted a coconut tree near the common fence. Now, trees have a mind of their own. They are living things, after all. So the tree in question decided to visit the neighbour, farmer B. As it grew, it bent over and entered the air space of the neighbour. It bore fruit. The fruit hung above the neighbour’s land. And so the neighbour laid claim to it. To whom did the fruit really belong? Now, you be the judge.

The decision was in favour of neighbour B. The law says that all the air, and beyond, over your land is yours. So, if one were to sleep on one’s plot of land and look up, straight up, that entire atmosphere is his or hers. The moral of the story: Do not plant tall trees close to the fence.

Let us think further.
1)     What if farmer A cuts down the tree out of pique, or quietly poisons it?
2)     How does farmer B reach his fruits?
3)     Who pays the taxes, if the owners are charged per tree as prevails in some districts?
4)     Will farmer A be charged with trespass, if he climbs the tree all the way to the top? We believe he would be trespassing.
Isn’t law fascinating? They say the law is an ass. But it definitely is not a donkey. You be the judge.

Please email your comments to [email protected] or
[email protected].

A New Column on Real-Life Legal Situations

Laws that govern our rights, life and liberty are complicated. We become aware of them only when we have a brush with them. One way to increase our awareness of the various laws is by discussing real-life cases. This is exactly what Bapoo Malcolm, a conscientious practising lawyer in Mumbai, will do—beginning with this issue. We invite readers to share their thoughts on each of the items because, as Bapoo says, “You be the Judge”. Email us at [email protected] or [email protected] – Editor


A yield of 19.4%?

That is what this “investment opportunity” from India Infoline offers. This dubious fixed income proposal is for those who have nerves of steel and money to burn

One of our readers sent me an interesting investment proposal, which he received from India Infoline. It involves placing money with a Delhi-based developer of properties by the name of Pratibha Impex. The company will pay interest at 18% per annum (p.a.) with quarterly payouts in Year 1 and monthly payouts in Year 2. The principal is proposed to be repaid in 12 monthly instalments after completion of one year. The marketing document tells you that you get a yield of 19.4%, which means that if you were to reinvest all your receipts at 18% p.a., the effective return would be 19.4%. The minimum investment size is Rs.35 lakh.

Many investors may fall for the high yield, without realising the pitfalls. Here are the many problems with the issue:

  • The total amount proposed to be raised is just Rs19 crore. And the caveat is that there will not be more than 49 investors. This is to make sure that that it does not become a ‘public’ issue and remains a ‘private’ placement, thus bypassing the SEBI registration requirements.
  • There is NO credit rating. The debentures are ‘secured’ by a piece of land at Noida, which according to IIFL, amounts to twice the total debenture amount, at current market prices. IDBI Trusteeship Services P Ltd is the Trustee for the debenture holders. There is a corporate guarantee by the issuer as well as personal guarantees of promoters.
  • The allotment will be made in the form of physical certificates and an endeavour will be made to dematerialise it within 30 days. There will be NO listing.
  • The investor has to open accounts with IIFL—demat, ‘advisory’ account, trading account, etc.
  • You cannot know enough about the promoters or their business. I could not locate any website through Google or any reference to their projects. One of the promoters is a governing member of CREDAI. The presentation mentions that the company is 25-year old, has developed 7 million square feet and has Rs33 billion worth of projects under execution. It is also stated that the company has an operational hotel managed by the Radisson group. They are also stated to have interests in hospitality, healthcare, corporate spaces and facility management.
  • There is no mention about the total loans of the group. We do not have an idea as to why a company that has Rs3,300 crore of projects under development is trying to raise a measly sum of Rs19 crore through a convoluted private placement route at a high cost.
  • The cover page mentions it as a primary issue and the inside page refers to it as a ‘secondary’ market transaction. Does it mean that IIFL or someone else will take it from the issuer at a ‘discount’ and issue it to the investor at par? The presentation mentions no ‘fees’ but the yield of 19.4% is qualified by ‘before fees’. So who is paying/receiving the fees?
  • Since it is an unlisted debenture, there would be TDS. No mention about this in the presentation.


Still tempted? Remember that liquidity will be zero, so no exit till the end. Given the changes that are happening in the real estate sector, it will become more and more difficult for the real estate sector to manage cash flows. From a business risk perspective, conservative investors would be better off giving this a miss. This is for those with nerves of steel and money to burn.



Sanjay Matai

4 years ago

Very true. Please don't believe in such fancy promises. I came across a similar scheme which I analyzed on my blog post last week: http://thewealtharchitects.blogspot.in/2...'

R Balakrishnan

4 years ago

Private placement to 49 is finally got by sending mailers to a few thousand people. Statutory requirement to keep a record of who the detailed Information Memorandum goes to. But mailers? They must be getting circulated and recirculated in order to pull people. A banker is supposed to sell a pvt placement only to a known person. But if you don't have a relationship with them, you will still be welcomed with open arms.


4 years ago

India infoline is known for such gimmicks . This is the most investor unfriendly company and customer unfriendly . They only care about themselves and their revenues .

Try this out firsthand by opening an account with them .


4 years ago

India infoline is known for such gimmicks . This is the most investor unfriendly company and customer unfriendly . They only care about themselves and their revenues .

Try this out firsthand by opening an account with them .


4 years ago

You couldn't have said it better sir ... no exit till the end!


4 years ago

I think the author is ill informed – s/he has confused a private offer to select individuals with an offer open to general public. When the investment is not even available to the masses, how can the author claim they are getting fooled?? Shows very poor research and dubious integrity on her/ his part.
Apparently media in the country will go to any extent to just publish controversy generating content, thereby grabbing “eyeballs” for their own selves in the process.


Bosco Menezes

In Reply to Vgupta 4 years ago

Guptaji, do the points mentioned in the article take on a different meaning simply because the offer was to a "select" audience.
I don't think the intent is to "publish controversy", rather to educate the general public about doing proper due diligence before entertaining such offers.

Selling the Client

Despite financial regulation in the US, conflict of interest continues unabated, with...

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